DoD tests AI models that make it easy to switch from vendors like Palantir
On Tuesday, Deutsche Bank (ETR:DBKGn) adjusted its price target for Assa Abloy (ST:ASSAb) (ASSAB:SS) (OTC: OTC:ASAZY) shares, reducing it to SEK310 from SEK310, while maintaining a Hold rating on the stock. The company, currently trading at $15.38 and near its 52-week low, has demonstrated resilience with a 8.65% return over the past year. According to InvestingPro analysis, the stock maintains an overall "GOOD" financial health rating. The revision comes as a result of lowered earnings per share (EPS) estimates, which have been decreased by an average of 6-7% primarily due to recent negative foreign exchange movements and assumptions about more dilutive mergers and acquisitions.
The report by Deutsche Bank highlights several factors influencing the revised valuation. Increased fiscal spending in Germany is leading to expectations of higher long-term interest rates, potentially delaying the recovery in European Union residential markets. In the United States, ongoing tariffs are adding a layer of uncertainty, with potential outcomes including higher inflation and slower economic growth. InvestingPro data reveals that three analysts have recently revised their earnings estimates downward for the upcoming period, adding weight to these concerns.
Assa Abloy is scheduled to release its first-quarter results on April 23, confirming the date noted in InvestingPro data. Deutsche Bank’s projections are aligned with general market expectations regarding organic growth, which is anticipated to be around 2%. However, the bank forecasts an adjusted earnings before interest and taxes (EBIT) margin of just 14.8%, a decline of 60 basis points year-over-year, and 70 basis points below the consensus. The company currently maintains a healthy gross profit margin of 41.77% and has shown revenue growth of 6.71% over the last twelve months.
The firm’s valuation of Assa Abloy stock is based on a multiple of 16 times enterprise value to EBITDA and 21 times price to earnings, using Deutsche Bank’s 2025 estimates. Despite the lower price target, Deutsche Bank continues to recommend holding the stock, citing valuation grounds for their decision. The current P/E ratio of 22x and EV/EBITDA of 13.87x suggest the stock is trading at relatively high multiples relative to its near-term earnings growth potential. Get access to more detailed valuation metrics and 8 additional ProTips by subscribing to InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.